SHANGHAI: China's startup board index hit its highest in more than four years on Monday, as investors cheered Beijing's fresh reforms in its capital markets to help bolster the world's second-largest economy.

At the close, the Shanghai Composite index was down 0.08% at 2,965.27, while the blue-chip CSI300 index was up 0.08%.

The start-up board ChiNext Composite index climbed 1.01%, its highest since Jan. 7, 2016.

Over the weekend, China said it would revamp its benchmark equity index by introducing more high-tech strength and removing loss-making companies.

The Shanghai Stock Exchange also said it would publish an index tracking the STAR Board, launched last July.

The decision comes shortly after China finalised rules for companies seeking to list on Shenzhen's ChiNext board that streamline the process and allow the market to fully determine IPO pricing.

The inclusion of STAR stocks in the SSEC will make its structure more reasonable and representative, as STAR companies represent the development direction of China's economy, Ma Wenyu, analyst at Shanxi Securities noted in report.

The reforms would bode well for the equities market, while securities and tech stocks would benefit first, Ma added.

Leading the gains, the CSI SWS securities index, a benchmark tracking major securities' companies, closed 2.5% firmer.

China left its benchmark lending rate unchanged for the second straight month at its June fixing on Monday, matching market expectations, after the central bank kept borrowing costs on medium-term loans steady last week.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.15%, while Japan's Nikkei index closed down 0.18%.